Berkshire Hathaway Increases Stake in Occidental Petroleum
Berkshire Hathaway, led by CEO Warren Buffett, has recently made a significant investment in Occidental Petroleum, purchasing 10.5 million shares for approximately $590 million. This latest transaction brings Berkshire's stake in the energy company to 238.5 million shares, valued at $13.6 billion, representing a 27% interest.
Buffett seized the opportunity to buy Occidental Petroleum stock at a discounted price, taking advantage of the company's recent stock price decline, which reached a 52-week low on Tuesday. These purchases mark Berkshire's first acquisitions since late October.
The buys are seen as a vote of confidence by Buffett in Occidental Petroleum and its CEO Vicki Hollub, particularly after the company announced its $12 billion acquisition of privately held energy producer CrownRock on Monday.
News outlets speculated that Berkshire had refrained from purchasing Occidental stock on the open market while the company was engaged in negotiations with CrownRock. However, with the deal now completed, Berkshire was able to make its move.
Despite concerns surrounding the CrownRock acquisition and its impact on Occidental's balance sheet, Buffett's investment sends a positive signal to the market. While some analysts consider the price of the deal to be high, Occidental could benefit from an increase in oil prices. However, should oil prices continue to drop, the company may face increased vulnerability due to its leveraged balance sheet.
These recent purchases by Berkshire Hathaway are potentially the largest made within a three-day period since the company began publicly disclosing its acquisitions of Occidental stock. As a 10% holder, Berkshire is required to disclose any buys or sells within two business days.
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